tv Markets Now FOX Business October 24, 2012 1:00pm-3:00pm EDT
people dying -- don't vote at all. tracy: it would encourage people to vote. it would be a good thing. we will see what happens in four years. lori: coverage for the kids who are not going to school because of election day. they should have choices, votes on line and go to local schools. with at a very good afternoon, i am lori rothman, we are coming off of the biggest one day sell-off in four months. one name sharply in the green, facebook shares soaring as wall street that the social media giant has found a way to make some money. analyst michael packard joins us straight ahead. new reports show growth of timco pulling back, treasury market should yield, the move to make the head of the fomc minutes. those are released at 2:00 eastern today. let's look at the equities market.
back to the floor of the stock exchange with nicole petallides. stocks posting modest gains with a long way to go to make up losses. nicole: the late losses friday we got 200 points to virtually flat. yesterday we drop 243 points so clearly we have to make enough on wall street. if you are able out there with some up arrows earnings were better today than we have seen over the last three trading days and that was something that contributed to the selling. dow jones industrials up 30 points. the gain is 1/4%. and again like the s&p 500. three 2 dow components, first in boeing, first quarter profit, the profit is something to watch, down at 6% and hurt by higher pension costs. they did raise their full year diet and that was good news but
they miss the analyst estimates. it is now 3/4%. third quarter revenue missing the estimate there. the other thing at&t to note, this name is coming. lori: oil extending loss of trading down for fifth straight day. phil flynn with the future of the cme, the fed decision, are traders watching for that? will that be a factor at all? >> already is. it is one of the reasons oil is down more than it might have been especially after that bill we had, 5.96 million barrels. this market has been down five days in a row. it is very oversold and plenty of supply but this fed decision
could change everything. doesn't mean anything about supply and demand. the fed will be more accommodative which is almost impossible to believe. we could see a rebound in oil. lori: what is going on with ben bernanke? any comments about ben bernanke and his behavior at some of the other fed officials those of weight? >> what we're seeing is pricing ben bernanke, probably going to be done no matter who wins the presidency. that has been the talk on the floor. even if you believe ben bernanke will quit or not people are pricing him the profitability of a romney victory. why is that significant? mainly because it leaves less quantitative easing, stronger dollar policy and stronger dollar policy is one reason commodities are getting crushed the last couple days. lori: fewer dollars to make up the price of the oil. very simple, thank you so much.
we have breaking news. bank of america is being sued by the justice department for $1 million for mortgage fraud, for losses at fannie mae and freddie mac. here to explain his liz macdonald. liz: the first time the department of justice has brought a suit of this time to recover losses against fannie mae and freddie mac. let's get to the details. here's what the manhattan u.s. attorney's saying about this lawsuit against bank of america having to do with countrywide loans. reckless mortgage practices spectacularly brazen and taxpayers have the bill. the department of justice basically seeking maximum damage and penalties over a loan program run by countrywide. countrywide originated $1.3 trillion of mortgages between 2005-2007 and represented a third of fannie
may's book in 2007. the lawsuit imply the essentially that countrywide helped push them into the arms of u.s. taxpayers with their very reckless practices that remove the underwriters and swapped in loan processors who were paid bonuses based on volume, based on challenging quality-control of defective practice. lori: the justice department is point mr. j almost a single finger at countrywide alone for pushing fannie and freddie in to bailout territory? liz: yes. the department of justice has moved -- the sixth time they have moved against the bank the we have never seen them -- trying to recover losses incurred by fannie and freddie and the justice department, watch this, serious and significant misrepresentation that bank of america made before and during the time taxpayers invested $45 billion in the
banks for the t.a.r.p. program. bank of america reached out to them and return calls for comment and the lawsuit is alleging bank of america refused to repurchase from fannie and freddie, and defect rates ten times industry standards. this is a seriousslosses we are going to be watching closely. -- the euphemism is a high-speed swim lane for the mortgage loan program to get volume out the door and into the hands of fannie and freddie. the hustle is what it was called behind-the-scenes. we will get back to you with more details. lori: the defense sector reporting, earnings and a common thread, the risks surrounding uncertainty and cuts to u.s. spending but could the election lift this cloud over the sector? the global head of aerospace sector research at credit
suisse, welcome. the right of sequestration, deep cuts in defense spending that come along, is it an elephant in the room to forecasting? you must wish we could get past it one way or the other? >> it is difficult not to much from an earnings perspective in the near term because most of these cuts if they should happen actually lagged by a couple years but from a sentiment perspective it is weighing on multiples. lori: tell me our earnings reports came in with northrop grumman, was there an overriding theme? >> it has been continuing all year. we are seeing weaker revenue giving the uncertainty, those in washington are somewhat more cautious with allocation of fundss but what we are seeing at the big offsets to to that are higher margins driving earnings and raises across the companies. lori: who is in the best shape from investor perspective? >> we are recommending raytheon which reports tomorrow morning. what we like is raytheon is not a prime contraator so it has
less headline risk to specific program platform cuts for ships and planes. it is more of a tear one supplier of tires and electronics. that end of the value chain is more resilience, a fairly attractive and has a high percentage of international business, the highest among the piers. lori: what technology is most in demand? >> something we call c 4 i s r, appellates and electronic surveillance reconnaissance computers communications, anything that has to do with getting data and information to the war fighter. lori: your research points to a romney victory as being more beneficial to the defense and aerospace sector. i you putting out two different outlooks or waiting until after the election? >> there is a prudence to some extent. we are in a better position to predict the election than anybody else. we understand this could go in both directions. it is interesting to try to figure out what is priced in the
stocks and sequestration has certainly been dominating on that front. we think the market is generally discounting some alternative sequestration post election regardless of who wins, some negotiated outcome but remains to be seen what will happen. lori: thank you. melissa: wall street friending facebook. stock is soaring to the. did you miss your chance? we will talk with michael actor who has been hitting the like button well before the ipo and even after all the criticism because of the botched ipo and stinking shares and always been bullish on facebook. we will talk about the latest earnings and prospects going forward and in the meantime gold is down by $7.20. more markets now after this.
lori: facebook adding friend on wall street, raising price target on the stock and ratings today after facebook posted a surprising jump in and revenue. look at shares of the social media giant. they are storing up $4 and change. that is 20%. my next guest has been bullish from the start. we are pleased to welcome back michael proctor. you were always confident in facebook yet there was a lot of
concern especially, using mobile supply platforms. >> i can't say that i knew what was going to happen but it was clear to me that facebook usage was supplemented by mobil usage the company had to address that and figure out a way to deliver ads on a mobile platform. they were early telling us how they were going to do that and sponsored stories and news feedback at the end of june and stock kept going down and investors expect investors expect immediate results. [talking over each other] >> facebook approaches delivery of that on the platform where any broadcaster would think about it. and they deliver ads appropriate
for the viewer on a mobile platform. it takes a lot ingenuity to deliver them and talk about that last night. the introduce a ton of product that can to be working maybe not as well as they do on desktop but it is only a matter of time before they figure that out. i don't hear anything from users that say they're dissatisfied with the way they're advertised. users are ok with it and investors are very happy and advertisers are happy. lori: are not unhappy with the share price. we are still way off of the ipo debut at $38 a share and there is a lock up. we have locked up over the next couple weeks which is going to be more than likely but what is your share price out what? do you see retracing the $38 level? >> a $35 target is a twelvemonth targets and i say it gets new year next year. i am confident that will happen.
we really only had two quarters of performance to guess by and we are guessing what we will do on the spending side but if they expand at the same level which is 60% of revenue, i have been making $0.65 next year and that implies something more like 80 or $0.90 the next year. you could get to a $35 target pretty easily. if they spend less than 50% of sales they will deliver a ton of operating leverage. earnings will grow much faster and we will shoot through that. [talking over each other] lori: that there on the right track? >> strategy is fine but they need to communicate strategy. [talking over each other] lori: mark zuckerberg has been quiet lately. >> he spoke last night for the same length of time he'd get on the earnings called three months ago. he stuck around and answered questions and 90% of what he talked about was new products and modernization as opposed to
talking about user experience. he at least is demonstrating he cares about investors and acknowledges fiduciary responsibility. is he ready to the ceo? i am not sure but him and sandburg, a pretty decent team. lori: we will leave it there. thank you so much. melissa: it has been 15 minutes since we checked on nicole petallides. let's see what she is up to. changes at the top for visa. nicole: we want to look at the credit-card company. remember the initial public offering? a big one on the stock exchange. now we are talking about a change at the top. joseph saunders, 66-year-old current chief executive with a change at the top which will take place on november 1st in and the new head will be charles sharp. charles sharks at on the board of visa from 2007 into 2011. he is an executive at j. p. morgan and heavily involved,
$950,000 a year in base salary and bonus of 500%. he will get $19 million restricted stock options. lori: speaking of management changes why did vikram pandit leave citigroup so abruptly? the fcc wants to know when charlie gasparino broke the news, he has breaking details on the story just ahead. check the dollar here, head of the fed, stronger, weaker, stronger, a bit of a stronger dollar here as we expect more accommodation or steady as she goes, nefarious monetary policy leading to dollar weakness of weight, $129.48. we are back after this.
situation room. julian assange's health is declining and asked britain to guarantee the wiki leaks founder saves passage to a hospital if he needs medical treatment. julian assange has been holed up in a london embassy since june to avoid extradition to sweden where he faces re charges. sources telling wall street journal and the york islanders plan to move the berkeley center in 2015. the islanders have called it homes in 72. the hockey club's owner plans to announce the change later this afternoon and that is your fox news minute. lori: thank you. fox business network reporting exclusively last night the sec is looking into the circumstances behind vikram pandit's to parter from citigroup. here with the latest is charlie gasparino. what is the sec looking into? charlie: think about how bizarre the announcement is an reporting by as too when we got to the bottom of it.
the announcement when it came out tuesday the sixteenth -- lori: the morning after reported earnings. charlie: not a word about this. i know wall street firms, wall street analysts that have done the analysis of vikram pandit's language during the conference call and he basically acted like he was going to be there forever or that is how he portrayed himself. this is what happened, this is what happens. they basically have the conference call, not a hint, the market closes they basically, mike o'neill, ceo, chairman says we like you to go. and mounted the next morning. clearly ousted him. and when--after they ousted him, the decision to resign. why is the sec looking at this? the decision to resign is a material statements -- miss statement. if they did oust him and they went out and telling people he resigned.
the second thing is how they roll this out was bizarre. weird, insane. that morning, the tuesday they announced it, there was every rumor in the world that they uncovered some scandal. i heard insider-trading. we have no proof but that was bouncing around the market, something causing him to do it because ceos don't go like this. it is much more planned, you have an earnings call you expect him to announce a material adventure in the earnings call. lori: after the earnings call, we would like you to leave, that is definitely not -- charlie: they decided before hand. my sources tell me -- cheryl casone has done some great reporting on this. she said john corbett replaced vikram pandit was on the ground the day before.
team manages their operations from europe. that gives a few more indication of this thing was planned. that this thing was planned and premeditated yet they didn't tell analysts. i am not saying anybody is going to jail. i can just tell you during a financial crisis firms like citigroup, i can't remember, they were at the worst but all the big firms were guilty of this. they misdirected the market. people like me who didn't believe them but other investors were caught off guard. lori: the market wants two weeks notice. what would -- [talking over each other] charlie: if they ousted him say it. i don't think you lose anything. we have a differing view, we want to do something else, you are done. we told him to go. number 2, the way they did it, doomed before the earnings call,
and do it at the earnings call. one of the things they're trying to avoid is to have korbut answer questions about vikram pandit. that may put him -- begged him to do it "after the bell" but very messy. there has not been a ceo departure this messy that i have ever seen. i have seen a few. this is -- you saw stuff coming with chuck prince when he got blown out during a financial crisis. he knew that o'neal was getting blown out. was a train wreck because of what was going on in the markets because he saw it. this was insane. people are asking questions. it is so insane. wall street firms have hired these sort of security firms that look -- fbi agents and cia agents to look at voice patterns to guess whether vikram pandit was -- tell from how he gave the earnings call, what he was -- he
thought -- the people who know that have looked at that and said there is no way. he was too confidence. there was no hesitation. rich: -- lori: part of the frustration is the questions asked subsequent to the announcement we never got a firm -- charlie: we got firm answers that contradicted what we reported and wall street was reporting and wall street journal reported after. it contradicted what we first reported in the journal did later and bloomberg as well, that he was ousted. it wasn't his decision. maybe it was his decision to leave that very second they wanted him out. we ran this by harvey pitt, a former sec chairman, one of the best white collar lawyers i have ever seen and said point blank, if it was x and they said why they got an issue and they do have an issue and an investigation and that is what
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it is up .1 of 1%. the truth is the major averages are not too far off the unchanged line. the nasdaq composite is sitting exactly there. look at two names on the move and decisively to the downside. we're talking drugmakers. looking at eli lilly and bristol-myers squibb coming in with results that put pressure on stocks. both missed analyst estimates top and bottom line misses. eli lilly is being hurt by the diabetes drug not doing well the both companies under pressure with news we heard from the two of them. back to you. lori: nicole, thank you as always. talk about fixed income. the "wall street journal" reporting pimco founder bill gross, the manager of the world's biggest bond fund is pulling back from investments in government debt. joining us to talk about that, the fed decision coming up this afternoon and all things related to fixed income, head of strategy at
rbs. hopefully we get that for you. the rally is running on tired and faded legs. bill, great to see you. what is your take? >> lori, you know i have great empathy for what bill gross mentioned this morning. at the same time i've been all around this country talking to major fixed income investors and i hear the same refrain. as we get closer to the election on november 6, with tightening national polls, fixed income investors are becoming increasingly concerned about the potential for a digital outcome on november 6th. just, you know, with respect to the conduct of tax policy, government spending, all of that. as a result we just see a lot of fixed income investors pulling back in what i would call derisking their portfolios. lori: i'm watching results of the 5-year action put out a few minutes ago, and it was pretty weak actually compared to some earlier rounds. but my question is this, bill. are we facing a situation
where we see interest rates rise sharply once we get past the election if they come to agreement to avoid the fiscal cliff? what is your outlook for interest rates? >> almost everything is predicated on what transpireses on november 6th. if we're lucky enough to get, avoid the recount debacle we had back in 2000, in our view, in the view of the markets generally is, that you know, a romney victory would be a great event at least in the near term for risk assets which would be the detriment of fixed income and treasurys. money would flow out of safe haven fixed income to assets like stocks. lori: would you recommend to investors similar to bill gross and you and your advice pare back on government debt in the portfolio? >> truth be told that is exactly what is happening. you saw huge investor demand for two year notes yesterday at basically 30 cents of yield. we saw a decent auction with
a near record amount of direct bidders for today's five-year auction. this two to five-year sector of treasury curve or fixed income markets generally is a lace where people like to hang out because it is sort of locked in or tied to the fed's policy guidance out to the middle of 2015. lori: no one is confident about the long end right now especially with our fiscal situation? >> investors tell you they don't know how to price the long end. we understand with qe3 and qe inifiti call it what you want at that inflation expectations are rising. it is harder to price higher inflation expectations in long duuation and long maturity treasurys with the twist which is removing net supply of treasurys in the middle of the curve and nbs out in the market. that is very difficult for investors. that's why we've seen derisking ongoing past two or three weeks. lori: not a lot of attention leading up to the fomc decision this afternoon but
there is some talk that bernanke morn than likely won't hang on for much that longer if we have an administration change. also we might hear some of the fed members be more vocal trying to state their case. do you think that will get some, let me ask you for what you're expecting out of today's meeting or what we should listen for because we know monetary policy will hold steady? >> as always we want to see what the fed will say about their assessment of current conditions. we don't see the current conditions have changed that much. consumer sentiment helped a little bit. retail sales have been relatively robust. home prices have continued to rebound. but it's a, it is a relatively recent rally. so i think they're just, we expect very little out of the fed, especially now we're down we're within two weeks of election. we think they want to keep the election at arms lien, stay the course and see what happens after the election and who is in power and adapt to conditions that result from that. lori: great stuff. bill, always great talking
to you. have a good afternoon. happy fed watching. >> thank you, lori. lori: tune in next hour for full coverage of the federal reserve decision on interest rates and more importantly as bill was talking about the accompanying statement and the fed's as sent half the -- assessment of current economic conditions. president obama dei will at thatting plans to bring the economy back to life but it might be too little too late. can governor romney one up him with less than two weeks to go to election day. we were talking specifically with bill o'donnell. remember he said no one knows how to play the long end of the curve. how do you factor in inflation expectations with our fiscal policy? 2.92% is your yield. we're back with more after this.
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>> i'm adam shapiro with your fox business brief. wall street is swinging between gains and losses ahead of the federal reserve's latest monetary policy decision do you out next hour. the central bank is expected to stick to the bond buying program it unveiled last month. hackers stole credit card information from barnes & nobles customers the bookstore chain is recalling all 7,000 pin pads at nearly 700 locations of the barnes & noble found hackers planted bugs in 63 pin pads across nine states. it might be time to change your passwords. flash data, password management company analyzed a list of millions of
lori: just 14 days before the election president obama released his new economic plan. or is it the old plan or the plan that never existed before that always was there? there is so much conjecture and confusion about it. what exactly does he propose to fix the economy bottom line is what voters want to know. here to break it down is rich edson. >> not exactly new. the booklet is new just that its contents were not. for weeks the republicans charged that the president had no plan for the future. with that the president's campaign printed millions of booklets to deliver around
the country, pages of pictures and accomplishments for economy. he asks for more spending on domestic energy. first term featured unprecedented push on green power. renewal of tax measures, for business invest. calling for familiar tax and deficit plans. on entitlements, promises to stop and oppose new republican plans to stop them. as far as comprehensive economic plans go, this one falls short. >> in terms of the specifics, specificity apparently doesn't win votes. so that is not part of the campaign agenda. >> the obama campaign says the booklet simply highlights proposes the president has been detailing for months and the white house has released long term and detailed budgets. they have gotten little or no support in congressional votes. lori. lori: rich, i mean can't disagree that it is a nice looking booklet. >> very nice. and not very he have had
heavy either. you can bring it around. lori: lunchtime read. thank you. get more insight on the president's economic plan if there is anything new to rich's point, probably not. david hawkins editor at cq roll call. can governor romney even say the president doesn't have a plan? can he accuse him of not having a plan to revive the economy? >> no, he can't accuse him of not having a plan. that is a bit of a overstatement. as your report just said old wine in new bottles or old ideas on glossy paper. we saw almost the same things, those of us who covered conventions saw on really thin newsprint the night of the acceptance sheet hand out. very similar document. what the president has been talking about. it is, however, probably not really the plan i don't think. i think that a lot of this has been looked at and rejected by congress. if he is reelected it will be refined significantly in preparations for the
so-called fiscal cliff talks which will be put off until next year. lori: is it interestingly the pamphlet is only sent around to the nine key swing states? >> well there is a limit how fast the presses can run. i mean what that is a signal of to me is, and it's incredible for those of us like you and me, lori, who have been thinking about the election 18 months, two years now, there are probably a couple hundred thousand people, these are the undecideds, if you're undecided in this race it probably means you haven't tuned in yet. there are people waiting to the last go weeks to tune in. presumably the obama campaign thinks getting this on the doorstep with less than go weeks to go will be the right time for their moment to focus people's attention. lori: we've known, david, to your point, all of those months, key driver, key moat site for voters, right, is the economy. find us jobs, improves the hoisting market. >> right. lori: does that change that at all? pamphlet, crisis unfolding and scandal with benghazi is
any of that influencing voters? >> a tiny bit at margins. moving one point here, one point there, a couple of points in nevada, maybe which we now think trending off that list of nine and into the president's column. maybe a little bit the other way in north carolina which we think is trending out of obama's, out of the toss-up column into the romney column. but really not much if anything, this is not a new point, probably had this on the air last couple days, it was discussion in last debate about auto bailout is really important. the president's line about detroit is alive or auto industry is alive and bin laden is dead, that he is hoping resonate in one state, ohio. whoever wins ohio is going to have a hard time losing the election. lori: i can't go without asking who you think should win? rasmussen, they're all neck-and-neck. they're tied up? >> i think it is, it is a national deadlock is all the polls show. i think if you play the
electoral college map game, it, it is, you have to give the edge to the president. if the election were held now he would probably carry just enough of the states to get just over the 270 magic number of electoral votes. just over. just over. lori: appreciate your expertise. thank you. david hawkins. we're a little late to check the market. nicole on the floor of the new york stock exchange. looking at movers in the restaurant sector. >> that's right, these are movers in the restaurant sector. let's start off with panera bread. it is a winner today, based in st. louis, missouri. beating the street and releasing full-year guidance. that is good news for panera. we'll look at buffalo wild wings based in minneapolis, minnesota. chicken wing costs are on the rise and that did in turn hurt their numbers. they in turn had to raise menu prices. they also lowered their full-year numbers about. back to you. lori: thank you, ma'am. google gone wild. street view feature going
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lori: breaking news. severe weather. hurricane sandy, meet her. she is slamming into jamaica with heavy rain. the tropical storm upgraded this morning to category 1 and the threat may be headed to u.s. forecasters at national hurricane center say tropical storm conditions are possible along the southeast florida coast, upper keys and florida bay by friday morning.
nothing to mess around with. a scary looking storm. on a bit of a brighter note home sales hit a two-year high last month. even in the hard hit midwest there are signs the housing market is picking up. we have jeff flock in indiana. >> lori, if you invest in home building stocks a year ago you would be making big bucks. first i will show you on the ground, this is outside indianapolis, had is ryland homes development called strong bow. i have the president of ryland homes indiana. we are surrounded by activity. does this mean the recovery is for real? >> i believe so. we hit our bottom in 2009 and we've been slowly increasing since that point. >> take a look at ryland homes, lori, if you would. walk over here. there are cement trucks coming. we have a load of sod walking through here. look at ryland compared to the homebuilder etf. that is xhb. up 57% is the homebuilder etf and ryland is up 140% in
terms of your stock, alan. >> we take a conservative approach and take advantage what the market is. >> you bought the piece of ground from a developer that didn't make it, right? >> yes. we come in, the great thing is, with, as a corporate, corporation with cash we're able to take advantage of good land situations and good markets. >> real quick before we get away, lori. i want to show you homebuilder stocks today. up today thanks to increase 5.7 and ryland the greatest up 2.7%. if i look at my numbers today. all doing well. all doing well. they were not doing well not too long ago. there you go. lori: those are beautiful homes. all ryland homes? >> these are about 350 by the way. 350. move to indianapolis you can save a lot of money. lori: prices in new york and surrounding suburbs that is a bargain, jeff flock. thanks for bringing that
story today. a slew of weak earnings results amplified concerns about economic outlook. homebuilders really a bright spot in this otherwise dreary earnings season. ryland shares risen 138% in the last year. up almost 2% today, as jeff flock showed us. set to report third quarter earnings after the bell. let's get the preview in today's trade with sandra smith. hey, sandy. >> hey, lori. what do you do with them? most analysts say the stocks are pricey at these lofty levels. look at ryland group reporting after the bell tonight. as jeff flock reported this stock hhs doubled so far this year about $33 a share. even better if you compare it to standard pacific, one of its main competitors. you see, standard pacific up more up 143% so far this year. only thing analysts like about ryland group it is underperforming its piers and could have catching up to do. analyst looking at, sales up
40%. expected to post really big numbers, guys. we're looking for cheesecake factory, another stock that performed very well in 2012, guys. it is reporting after the bell. we'll have those for you. two stocks looking pretty good. not today though. cheesecake factory, lori, down 1% heading into the results. lori: that is not a bad omen people concerned ahead of it. thanks as always, sandra. tune in for all the breaking earnings reports on "after the bell" on 4:00 p.m. eastern. google street view cameras taken you through the palace of versailles and streets of new york city and now through the grand canyon. they have begun the mapping the grand canyon using its technology. google using cameras mount the on a backpack for the first time to capture 360 degree views of the national park. a google trek tore hiked 10 miles on monday with a 40 pound backpack as you see here, following the bright angel trail which descends over 4,000 feet in
obviously verizon. okay, i have a different chart. going that way, does that make a difference ? look at verizon. it's so much more than the other ones. so what if we just changed the format altogether ? isn't that the exact same thing ? it's pretty clear. still sticking with verizon. verizon. more 4g lte coverage than all other networks combined.
where our dedicated suppt teams help you know more so your money can do more. [ rodger ] at scottrade, seven dollar trades are just the start. our teams have the information you want when you need it. it's anothereason more investors are saying... [ all ] i'm with scottrade. >> markets really drifting going nowhere fast as we await the 2:15 eastern fed decision. i'm curious in the fed acknowledges slightly better economic data. ashley: they will probably tout housing for sure and we'll get some language of more positive signs. as we know the recovery is ekingly slow. we're not expecting that much else to be honest. we have a panel of experts. and end of operation twist. so what happens then? >> i will twist myself on out of here. tracy: you have a fabulous
die. >> thank you. ashley: hi, everyone, i'm ashley webster. tracy: i'm tracy byrnes. we're waiting on the fed with the dow just hanging out up 17 points right now. what will chairman bernanke and company say about economy, jobs and fed's ongoing stimulus as we mentioned. fed's statement and our full analysis is ahead. ashley: uncle sam is suing countrywide for one billion dollars. they say they dumped mortgage loans on fannie and freddie in a massive fraud. tracy: boats real estate, stocks, cash and more all before the new tax changes kick in next year.% this is assuming we fall off the fiscal cliff. so will giving now lead to bigger savings in the future? we're going to find out. first, top of the hour. time for stocks as we do every 15 minutes. nicole petallides on the floor of the new york stock exchange, also awaiting this big fed decision. hey, nicole. >> hey, ashley and tracy.
this is very interesting. one thing they have done on the floor of the exchange on fed day they await to hear from the fed and get quieter. i all right started to hear a few shhh. it builds anticipation from what we may or may not hear on fed day. what is interesting on this particular fed day i talk to traders they're not expecting too much. they know the election is coming up, right, 15 days away. we heard a lot of companies talking about the global outlook and some softening. so they're expecting much of the same for the fed. we key into every moment because you never know what they may or may not say. let's take a look, the dow, nasdaq and s&p, you do see up arrows across the board. just barely heading on to gains for the nasdaq and s&p. and some names leading dow, jpmorgan and united technology. back to you. tracy: thank you, nicole. we'll see you in 15 minutes or so. ashley: as we just said, just minutes away from the latest fed decision. they're going shhh on the new york stock exchange floor.
let's get action from the cme. fox business contributor phil flynn of price futures group standing by. phil, we're minutes away from the fed. i get the sense people are not expecting a whole bunch of anything today but we shall see. >> you're absolutely right. a lot of apathy. normally we're on the short end of the yield curve. before the fed decision you see a lot of orders coming in. people going against or betting on the consensus. we're hardly seeing any orders come in. that is very unusual on a fed day. that kind of shows you a lot of people don't expect a lot to happen. if you look at the fed fund futures of course, they're not even pricing in the possibility of an interest rate increase until august of 2014 for the july meeting there is a long way in the future before they will move. that doesn't mean the fed meeting will not be very exciting because a lot of people are looking at the last fed meeting before the big jobs report, before the election right now, could be very important depending on ben bernanke's future.
that has been subject of a lot of debate for two reasons. rumors that he will quit no matter who wins the presidency and surge with romney in the polls right now increasing the odds we could see a change in fed leadership and policy. look at the different fed governors to see if they're leaning a little bit more independent than hey have in the past. that's what a lot of traders will keep their eye on. ashley: big talk about mr. bernanke's future. phil flynn, thank you very much. tracy: almost more talk of that than the statement, right? for more what to expect from the fed let's bring in our all-star panel. we have former economist at the federal reserve, now a resident scholar at the american enterprise institute. mike crofton president and ceo of philadelphia trust company and mike coatae, ing investment management. thank you all for being with us. doug, i can't to start with you first because i thought your notes were flat-out interesting. you say the fed is flat-out interfering with the
markets. how so? >> i think they are. the law of unintended consequences i mean their qe3. i was all for qe1, qe2, operation twist. i think qe3 is crossing the line and i think they're interfering with the markets and the unintended consequences is if they are not doing with this policy we might have resolution on fiscal cliff. we might have resolution on growing debt. we might have pro-growth economic policies. i think they need, they're doing too much. ashley: let me bring in steven with that in mind, what doug just said, do you expect perhaps the fed to consider expanding qe3 to compensate for the end of operation twist? is that a possibility? >> i think it is more than a possibility. i think it is probably going to happen but not at this meeting. i they will defer that decision until december and make it at that point. they will have the benefit of a couple more labor
market reports between now and then as they try to assess what the economy looks like. tracy: mike, you too, i know you're expecting not to hear a whole heck of a lot out of this announcement mere but at the same time could well be market moving, no? >> yes, it could be market moving. i actually think the markets expect the fed to say something positive along the lines they will continue to expand their programs. although if they don't say that, the market will probably give up some more ground today because earnings and revenue forecasts off quite a bit and the market needs something good to latch on to get to higher levels. if the fed comes out and does nothing, the market trades off. ashley: let me go back to doug. the fed is in a holding pattern if nothing else until it sees substantial improvement in the labor market. when do you think that will be? i'm sure they will tout, we've gotten down to 7.8%. but you think it will take more than that. how long could they wait until they see that turnaround?
when will that turnaround come? >> well the fed was pretty clear, even if they see a turnaround they're going to continue the program which is a concern to me, is, they, they are the market now and in mortgage backs, and i think that doesn't bode well for price discovery. price discovery is gone. they're using quantity. they're using quantitative easing. i think that is a problem going forward but they will keep going and i think it is working. housing, the numbers today were great. unemployment is starting to come down especially if you look at initial unemployment claims which we think are a better barometer of real employment. so it's working but they said they're not getting out for a long time. tracy: how can they quite frankly, right? ashley: yeah, my question how much of this improvement is in the real economy or is it banks that are getting the benefit of all these
really low rates and extra money. >> that is a great question. we'll pose it to our guests when we come back. ashley: steven, mike, douging don't go anywhere. fed decision moments away. what the fed will say about the economy, qe and more? that is coming up next. tracy: as we do every day at this time how oil is doing. oil down 93 cents at $85.74 a barrel. we better start to see that at the pump. we'll be right back
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tracy: nicole petallides on the floor of the new york stock exchange. phil flynn at cme. doug cote and are financial --. ashley: "brady bunch.". tracy: you guys are really good in the little boxes actually. i will throw to mike. one thing we were talking about earlier is about ben bernanke. what do you think of that? >> i think ben bernanke we like to get out regardless who is elected. probably a good time for him to go. it will be very difficult from this-point moving forward. the fed has done all it can. he talks about the legislature needs to take a next step which is fiscal policy. that will be the hard stop. i don't think he wants to be around to watch his handy work go down in flames. ashley: mike, i want to
bring you in to answer the question. just before the break, has quantitative easing really helped the real economy? we know it helped the banks but the banks are not really passing on all of this liquidity. so has it really helped the real economy? >> i think it's helped in two ways. one, it put the stock market. it helped banks obviously as you mentioned. but it also helped consumer confidence. i think that is what is was designed to do all along. consumer confidence is reflected from two basic components, the stock market's performance and housing's performance. both are performing well. i think that led to increase in consumer confidence so it had its effect. tracy: nicole, let's go to you on the floor. what do traders think about ben bernanke leaving? right now he was their punchbowl, right? money kept coming, market kept going up what if he leaves? >> when if ben bernanke leaves? the truth of the matter is traders are talking about what ben bernanke has done this far. of course you see the market running up, the whole idea of qe3 helped to boost
markets throughout this year. however now at this point traders are looking to not hear too much from the fed right now. they are not really focused on ben bernanke at the moment but the anticipation is that he does leave. they don't expect him to stay at the helm of the fed at all. ashley: phil, let me bring you in. you mentioned mitt romney. if he wins how does that change fed policy? we know ben bernanke will be out according to mr. romney. >> i think you will see a big debate within the fed about just this, qe3 3. mitt romney made it very clear he is not a qe3 guy. he is a strong dollar guy. that means everything we believed in for some time. you ask the question has qe3, qe1, qe2 worked? it did stop the bloodletting. it slowed everything down. now it is the great enablesers for government not to act. that is the big issue. why are we heading to the fiscal cliff? because the federal reserve is carrying the load.
they don't have to ask the in europe because the federal reserve is qe3. that is one of the reasoos we're pushing back a spanish bailout. we're seeing a lot of pressure on these markets in recent weeks and uncertainty about the fed can have a major impact you. but even though it will maybe tank markets initially, long term could be very bullish because it will force governments to do what they need to do to fix the economy and not just depend on economic policy. tracy: steven, we're awaiting on the decision. we'll bring it to everyone as soon as we get it but as doug mentioned earlier there is unintended consequences of all this money flowing into the market and one would be inflation or at least we thought. where has it been? >> there hasn't been any significant inflation. most inflation measures are still around the fed's target of 2% or maybe a little bit lower and i think that is the reflection of the weak global economy. ashley: yeah, doug, let me bring you in because i liked your notes on this you were saying, look, the low rates of alan greenspan of course helped to create the housing
bubble. what do you think will be the consequences of all of this cheap money? >> well it might not be inflation because there is so much mon terri destruction and in some ways they're mitigating deflation. it might be something with the banks. it might be, if you look at the interest margin banks -- >> no change in policy. no change in policy. qe3 remains in place. no change in short-term interest rates. i'm peter barnes at the treasury department with the statement from the fomc as it wraps up a two-day meeting starting with the economic analysis the statement reads quote, information received since the federal open market committee met in september suggests that economic activity has continued it expand at a moderate pace in recent months. growth in employment has been slow and the unemployment rate remains elevated. household spending has advanced a bit more quickly but growth in business fixed investment has slowed the housing sector has shown some further signs of improvement albeit from a
depressed level. inflation recently, inflation recently picked up somewhat reflecting higher energy prices. longer term inflation expectations have remained stable. the committee remains concerned that without sufficient policy accommodation economic growth might not be strong enough to generate sustained improvement in labor market conditions. furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. the committee also anticipates that inflation over the medium term likely would run at or below its 2% objective. to support a stronger economic recovery and to help insure inflation over time is at the rate most consistent with its dual mandate the committee will continue purchasing additional agencies mortgage-backed securities at a pace of $40 billion per month. the committee also will continue, through the end of the year its program to extend the average maturity of its holdings of treasury securities, operation twist twist, and is maintaining
existing policy reinvesting principle payments into agency mortgage-backed securities. these actions which together will increase the committee's holdings of longer term securities by about $85 billion each month through the end of the year should put downward pressure on long-term interest rates, support mortgage markets and help make broader financial conditions more accommodative. the committee will closely monitor information on economic developments in the coming months. if the outlook for the labor market does not improve substantially the condition will continue purchase of agency mortgage-backed securities, undertake additional asset purchases and employ its other policy tools as appropriate until such improvement is achieved in the context of price stability. to support continued progress towards maximum employment and price stability the committee expects that a highly accommodate taif stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens. in particular the committee
also decided today to keep the target rate, target range for the federal fund rate at zero to .25 and currently anticipates that exceptionally low levels for the federal fund rate are likely to be warranted at least through mid 2015. the vote was 11-1 for this policy action today with jeffrey lacker, the president of the richmond federal reserve once again dissenting. ashley, tracy, back to you. ashley: peter barnes, thank you very much. pretty much as expected. everything the same. the one, you know, accommodative policy will remain appropriate for considerable time even after economic recovery strengthens. tracy: yep. additional asset purchases will continue. to your point, it will keep going. this is qe infinity. nicole, we've got a dow at 7 points right now. markets not particularly happy i guess? >> what is very interesting we saw the dow dipping into negative territory after we got this news. there is a couple of factors really don't bode well. just talks about the global economic picture and the
uncertainty that remains and basically talking about the growth that we're seeing for our economy currently. still needs the stimulus. still needs the help from the fed and they made it very clear, that they still need to do all of these things that they're doing, which is buying mortgaged-back securities, operation twist. keeping these low levels until 2015 in order to keep everything afloat so we don't collapse. basically showing you while we're seeing moderate improvement nothing's great yet. that's what they're telling you. ashley: also seeing the dollar adding games against the euro of a the fed's statement. also mentioned spot gold staying lower at around i guess 1700, phil flynn, after the fed's statement. not a big surprise. >> no, it wasn't a big surprise. seemed like as they were reading the statement they were hitting buy and sell buttons for every syllable. at the end of the statement now we're turning a little bit more positive commodities, negative dollar. the dollar index went negative there for just a
minute and the metals, the gold after dipping just below 1700, it is creeping back up here. but you're seeing here the market got exactly what they expect. no shaking of the boat ahead of the election. ashley: right. >> ahead of the jobs report. there was really nothing in there that really changed our outlook. i think it was a very, very much, not a courageous statement. we didn't see any of the fed governments, not a lot of dissension from the decision. ashley: yeah. >> i think a lot of people don't want to make waves ahead of the election. tracy: but steven, as our former federal reserve economist i throw this to you. the statement did say that the growth in fixed spending basically company spending it's slowing. that is not a good sign, is it, for the economy? >> it's not a good sign and a really lot of cross turns in the data. it is true retail sales look good and housing sector is starting to recover you about business spending is very weak and that's going to create a drag for the economy along with weak conditions in the rest of
the world. so, no, i don't think the economy is doing very well right now at all. that's reflected in the fed statement. ashley: mike, to that point, i want to mention housing. the fed did note that the housing market has picked up but it also noted from extremely low levels. so do not get too excited because you have to consider where we're coming from. >> yeah, that's true. plus there is a big overhang of existing homes still in the market. a lot of housing numbers reflect new home market picking up steam. a lot of existing homes are not moving. they're not priced to clear. so the housing market has a lot of ground ahead of it before we actually say it is recovered. what i found interesting about the meeting there was only one dissenter. i would have thought there might be more than one dissenter if bernanke were thinking about moving on. tracy: doug, earlier we mentioned that you thought qe3 crossed the line. they're interfering with the market. how are you feeling now because sounds like interference will be around for a long time?
>> everyone is saying nothing really happened. a lot has happened. they will maintain an extremely aggressive stance on monetary stimulus. that's not nothing. that's a lot. i thought i got mixed signals on operation twist. seems like they kept the door open that operation twist could be continued. so they're all in. ashley: nicole, back to you on the floor. seems like we're getting back to where we were, not a whole lot in this statement to move the markets i don't think other than same as you were. >> right. well they talked about the economy expanding moderately. housing improving moderately. talked about business spending slowing. the one piece i think is interesting, the american people, just shows a resiliency throughout this time, tough economic times. household spending actually advancing. you see americans who really want to do more and spend more and build the economy and build gdp and yet they get caught again with that
spending because there is no jobs to support that. how do they buy a house? how do they buy anything for that matter, if they don't have the jobs and economic expansion to support that? tracy: doug, to your point, they saided there would be additional asset purchase, considerable time after the economy strengthens. even when we see the economy getting better there will still be flooded this market with money. again, i don't know how much longer we can keep the market floating on air like this. >> you can't. it is unsustainable and any way you look at it. congress breathes a sigh of relief because once again they don't need to do anything. but at some point in time you need some real policy. ashley: you know i wanted to bring in, i had a question here, i think, i could mention it to doug. let's go with doug on this. there is the belief that the fed should take on numerical targets. as long as the unemployment rate remains above 7%, as long as inflation doesn't
rise above 3%, then rates will remain at zero to a quarter of a percent ad nauseum, way on into the future. do you think that is reasonable? >> no, it's not, it is not reasonable at all. i think it is another policy tool. it shows they have more but i think, again, this is all unsustainable practices policies and we're going to get to the sustainable ones like pro-growth, economic policies. tracy: you know, phil, throw to you. one of the changesswe did see that they mentioned inflation was slightly ticking up and it was because of energy prices. what happened going forward? you're seeing prices increase down there. >> well, right but apparently the guys a the fed must be brought to the meeting in a limousine because they haven't filled up their gas tanks. one of the most dramatic drops in gasoline prices we've seen in history. that goes to their point these inflation pressures we're seeing because of food
and energy are transitory. it is not going to impact their long-term outlook. in other words they're saying don't worry about inflation. and you have this compadre over in europe, mario draghi in europe saying listen guys we need to get the bond buying going because i'm still worried about the inflation. that is the mind set for them. europe is saying the weakness in the market because europe can't get their act together. the fed is all in. europe is on the sidelines. i think if we got a clear signal out of europe on board, we would get the sugar high rally but right now the fed can only do what they can do. tracy: when gas prices were going up said inflation was contained of the now we're seeing oil prices dropping we see inflation down there a little confusing. ashley: with all this money flying around inflation is not an issue. fingers crossed. we shall see.
thanks to nicole petallides, phil flynn, steven, doug cote and mike crofton. thanks for being here on fed day. tracy: good stuff. that was the big change in the language they saw little inflation in their big ol' limousines as phil points out. coming up we'll have much more on the fed's statement and market reaction. ashley: plus two weeks before the election president obama's campaign is passing out new pamphlets on his plan for the economy. what exactly is in that plan? we're on the story coming up next. first let's take a look at some of today's winners and losers. the dow up 15 points. nice day. a monster day for monster beverage, up 13%
as we do every 15 minutes. the dow dipped into the negative but back 25. nicole petallides on the floor of the nyse with a very -- the very latest on what we can expect. nicole: we are looking at a market that right now has come back. we dipped into negative territory briefly as we heard from the federal open market committee and the latest in their findings and decisions as to what their next moves are through the year 2015. it shows a weak global economic picture and shows you how much the fed really believes we need continued stimulus and low rates and low mortgage rates. look at the dow interday for you. we see something else worth noting which is the vix, the fear index which is to the down side. the dollar accelerated is
pulling back and gold is to the downside. these are the factors we look at very closely after we hear from the fed. a couple other things we noted with business spending, that was a little slower. we talked about inflation in the short-term getting a pop from energy but long term looking more stable and traders expected they would get what they expected considering the election is 15 days away so that is very key as well and they got what they expected to a certain extent. you don't want any surprises election.ore the presidential ashley: you don't want to rock the boat. thank you so much. we will be back in 15 minutes. tracy: two weeks until the big election and president obama just released his new economic agenda. let's go to rich edson in d.c. with the details. there is a brochure. rich: sort of a booklet, 20
pages but for the most are a summation of the plans. republicans charging president obama with failure to lay out specifics for a second term so the obama campaign has begun handing out this booklet detailing the president's first term. ideas, pictures of the president with school kids, seniors and health care workers and includes 20 agenda items like spending energy including green energy and renewal of stimulus tax measures like special expense business investments, very familiar tax deficit plans and on entitlements mostly offers promises to stop the republican medicare plan and oppose their old social security one. one economist says the book what falls short. >> if i were looking for a serious plan for jobs i would want to see some projections about unemployment, people who have given up and putting them back to work and i don't see
that in this document. rich: the president has been offering his full agenda for months and released budget and the campaign says governor romney needs to offer more details on his plans like which tax deductions he wants congress to eliminate. >> people barely one to read 140 characters on twitter nowadays. [talking over each other] dennis: we want to get you up to speed on the other big story, the justice department finding a mortgage brought suit against bank of america seeking $1 billion for losses at fannie mae and freddie mac. liz macdonald all over this story with the latest. liz: that is right. this is being called a new front in the government's prosecution for the mortgages and the government saying it will try to recover damages suffered by
fannie mae and freddie mac. and after bank of america acquired country wide, the government is now saying it wants they hustled program, high speed high volume loan program to initiate rapidly all sorts of mortgages and is being called by the u.s. attorney reckless, spectacularly brazen. sticks taxpayers with the bill. the inspector general for release -- for t.a.r.p. is joining the suit as well. christine romero says serious misrepresentation they made before and during the time taxpayers invested, $45 billion in the bank and what we are hearing is according to the lawsuit bank of america paid out bonuses based on volumes and bonuses to individuals in the bank who objected to any quality
control of these loans. some of these loans had defects ten times industry standard. they were then sold to fannie and freddie and the bank is essentially being charged with allegedly helping to drive fannie and freddie into taxpayer's arms via considership of the treasury. bank of america has yet to respond to allegations in this lawsuit. a very intense, very heated back-and-forth. we are behind the scenes between the bank and justice department and it is one we are watching closely because it involves countrywide and is the sixth time the department of justice has far back against the bank in recent weeks. wells fargo and deutsche bank are among the six. ashley: eating it up. thank you so much. traay: oil closing down $0.94 at $85.73 a barrel. that is a loss of more than 1%
to phil flynn's point earlier, they fill their own. new home sales bouncing back to their highest level in two years. we will visit one housing price that is booming in america's heartland. ashley: let's look as ten and 30 year treasuries with the fed's statement pretty much as you were. the yield 177 on the ten year, up one basis point. on the 30 year, pretty much the same story, about three basis points at 2.19%. we will be right back. [ male announcer ] this is steve.
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lori: i am lori rothman. the market swinging between gains and losses after the federal reserve's monetary policy as expected central bank is sticking with the bond buying program that is q e 3 that it unveiled last month. the dallas 16 points at 13,118. the u.s. may surpass saudi arabia as the world's top oil producer. america is expected to produce eleven million barrels of crude a day. saudi arabia byycomparison produces 11.6 million barrels a day. the u.s. will likely produce 15 barrels a day by 2020. new york islanders staking their
new home sales to a level last month not seen since the first time home buyer tax credit was in each act. another sign the housing recovery is under way? jeff flock in indiana. is it? jeff: one reason i think so if we look at home builder stocks, i want to show you on the ground, this is a development outside indianapolis. take a look, putting the paint on this one. in the dust booming. if you look at the numbers let's put the numbers up on new home sales, if you look compared to
the boom times we are not at huge numbers we were in the boom times, you are coming back and you feel it has legs. >> it definitely has legs. we have been sitting back for many years and we're coming back and making strong investment and seeing real productivity and real demand. jeff: this is one of the homes your building outside indianapolis. inventory finally is down so you are getting people who now are looking for new homes and there's not enough to supply them. >> inventory sales have been good. we are low on inventory and high in demand and people selling homes not waiting for a new home to be built and buying inventory. >> what is the average price? this is all ready for drywall. take a look at the electric in here. this is one of the places that could put electric, a conduit in chicago. they charge you a lot.
before we get away, the stocks, we want to tell our investors what stocks are doing. look at the home builder stocks. is incredible what they have done over the last year. pulte up 140%, lennar up 120%, k. b. holmes, they have all done well. that is good news for allen and other folks out there who are being told are finally being able to sell their other homestead buy new homes. that finally happened. >> everything is more expensive in chicago. [talking over each other] tracy: thank you so much. ashley: they called the battle of the egos between media moguls gwynn going to liberty media's john malone and the ceo of
serious acts them will step down in february as liberty prepares to take over. dennis kneale covering the story joins us with the end part of the final chapter. dennis: a tale of greed and the trail. no harmhisson calling it quits as the company he built gets taken over by the billionaire return to for rescue. john malone controls liberty media and the deal is one of his best ever. in early 2009 sirius in danger of defaulting. malone had liberty loan $550 million when no one else would. cereus pays him back in full and six months later, malone got as his loan fee of a 40% stake for all of $12,500. that stake worth $3.6 billion. liberty spent a few hundred billion more to raise it to shy of 50%.
he doesn't like working for a boss and malone told me mel ott to get over that. he has too much pride. lookouts seriously successful he has been. he came into serious in late 2004 and sent subscribers of 30fold and now 70% of new cars acquired the main rival x em with revenue of 50fold to $3 billion this year so john malone knows mel big time. but mel bones malone too. started stocking last april and that is when mel started selling his share. since then mel has sold ninety million shares reaping a staggering $170 million in profit. as successor search inside and outside now underway. liberty guys are running it. mel is 69 years old but people who know him say they would be shocked if this really is his
last rodeo. take a watch on this one. ashley: we have not heard the last of him but the numbers are impressive for what he did. thank you so much. tracy: i think malone is 71, happy someone is calling him a cowboy. quarter till the hour. time for stocks as we do every 15 minutes ago to nicole petallides on the floor of a stock exchange. you are looking at facebook but no reaction to this fed announcement. nicole: let's look at the market averages. you see the s&p and the tech has the nasdaq are just kissing that unchanged line. going nowhere fast these major averages. you can sense of feeling of wait and see. we did not get much from the fed one way or the other but the global picture, the economy, the economic outlook is soft. we have a lot of earnings that have been weak without outlook such as microsoft, ibm, intel to name a few, ge, other names on a
move like facebook, that is a winner after is a came out with their numbers so don't lose sight of facebook yet, zynga a less risk and mobile that revenue less risky, some analysts were saying. even talking about the lockup, the expiration as they start to come to gauge where insiders can sell. lot of analysts saying that is your chance to buy in. the ceo is $38 ipo but up 20%. >> 20% is nothing. see you at the top of the hour. ashley: wealthy americans rushing to give away big money just in case new tax laws take effect and maybe give some of that away. tracy: look at today's winners and losers on the nasdaq as we
sandra smith here today with today's trade. look at two big names, boeing and zynga. tracy: billing should have impressed the market and seen a big bunt but we are not getting it and the stock is not. no boeing but even though they beat wall street expectations and raised outlook for 2012 for the third time this year which could be part of the problem but the company -- the ceo credited the spectacular results of big increase in aircraft sales, the company doing very well but when you raise your outlook three times you set the bar pretty high. this beat expectations is not going to cut it for the stocks those stocks fell flat and pension costs a problem for the company. income was actually down and -- [talking over each other] tracy: zynga if you don't know what it is is gaming and
accessible on facebook, mark zuckerberg on the phone call after facebook earnings said gaming isn't exactly what we thought it was going to be, counting as much revenue as it fought so zynga reporting "after the bell" tonight, two forty million average monthly active users, but going public. the stock lost 77% of its value so has a lot to prove so we will let him see what happens jon corzine. ashley: don't miss extensive coverage of earnings with results from zynga and cheesecake factory at 4:00 eastern time as i host "after the bell" alongside liz claman. tracy: save later? if the new tax law kicking in in january changing federal gift tax exemptions, protect your gifted assets.
price waterhouse coopers personal financial service partner here with us to sort this out. more people are talking about this. a single person can gift, no taxes, $5.2 million. if we fall off of the fiscal cliff it goes down two million. >> a lot about the income tax people need to take advantage of this window of opportunity to get the tax rates. as you are saying the lifetime exemption could go from $5,120,000 per person down to $1 million in january. same thing with the rates. the gift tax rate is 35% scheduled to go to 55% come january so it is really a time to think for your gifting strategy and whether to take advantage of the law. tracy: the estate tax mirrors the gift tax. >> so much planning for people
who have money. they can really be benefiting from free gifting. >> a lot of consideration. lookit your financial situation. and gifting appreciated assets, and errors is a good idea right now. tracy: if you give to education and medical expenses send the check to the institution doesn't even bite into your exclusion. >> you have an annual exemption of $13,000 a year and if you decide to pay directly tuition or medical it will not count against the annual amount let alone a lifetime amount. tracy: anyone who needs something to do with their money on will send you my kids to college fund. the other thing i am thinking in my twisted head is married couple can get this twice which
brings me to $2.4 million. even if i'm not married should i get married and give away $10 million and deal with the marriage next year? >> i won't give you marriage of vice but you are absolutely right in the sense that you have trying to -- [talking over each other] >> the appreciation, if this is time to consider it, and the other thing is how to gift. because if you want to give them out right $8 million probably not, probably want to take advantage of trust. at least hugh can set up and dictate when they can get the assets and under what circumstances. you want to be smart about it. tracy: you can put life-insurance policies to your house or anything in a trustee--people need to sit down and talk to their adviser. wish we had more time but it
will come back again and again. come back before the end of year. [talking over each other] tracy: if i were rich i would be getting married tomorrow. [talking over each other] ashley: i will be back in an hour. i will be back in an hour "after the bell," liz claman will take you through the hour of trading. and we will talk to the f squared ceo and president. your ago he wasn't begun stocks. 50 visages portfolio intact and now he is fully invested. why he is hot on u.s. stocks and where he is investing. count down to a closing bell is next. before copd...
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